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A box of ground beef patties allegedly containing "pink slime" is cordoned off from the rest of the meat in the freezer at Orchard Gardens K-8 School in Boston, March 21, 2012. (Evan McGlinn/Copyright 2017 The New York Times)

South Dakota meat company in 'pink slime' case launches fund for ex-workers

The South Dakota meat processor that sued ABC News over the characterization of its top-selling product as "pink slime" in TV news reports has set up a $10 million fund to help former employees and communities affected by the plants it closed in 2012, it said on Wednesday.

The privately held Beef Products Inc sued ABC, a unit of Walt Disney Co, in 2012, saying ABC defamed the company by using the term “pink slime” and accusing it of making errors and omissions in its reporting.

Walt Disney Co paid at least $177 million, in addition to insurance recoveries, to settle the case against ABC, according to a financial filing with the U.S. Securities and Exchange Commission. The settlement was reached in June after a 3-1/2-week trial.

BPI said in the lawsuit that after the ABC News stories ran, its revenue declined and it had to close three plants in Texas, Kansas and Iowa.

BPI said on Wednesday it is working with former employees to apply for assistance with the help of the Siouxland Chamber of Commerce and other organizations in the affected communities.

The settlement proceeds were not needed or directly used for creating the fund, Rich Jochum, BPI's general counsel, said in an interview. The company felt it could not launch this effort until after the lawsuit was settled, amid concerns over creating issues that could affect the case, he said.